Subsidized and Unsubsidized
Federal Direct Loans
Direct loans are either subsidized or unsubsidized. Repayment on both loans begins six months after a student graduates, leaves school, or drops below half time enrollment. There is also an origination fee associated with both loan types.
A Master Promissory Note (MPN) and Entrance Counseling must be completed at Studentaid.gov before the loan(s) will disburse.
Complete an Annual Student Loan Acknowledgment each year you accept a new federal student loan. Our goal is to help you understand how your loans affect your financial future.
What am I acknowledging?- If this is your first time accepting a federal student loan, you are acknowledging that you understand your responsibility to repay your loan.
- If you have existing federal student loans, you are acknowledging that you understand how much you owe and how much more you can borrow.
- Borrowers accepting a subsidized/unsubsidized loan, a PLUS loan for graduate/professional students, or a PLUS loan for parents.
- Most people complete the acknowledgement in less than 10 minutes.
- The "Annual Student Loan Acknowledgement" process is available on StudentAid.gov.
Please note that accepted loans will be placed on a 30 day hold for disbursement for first-time undergraduate loan borrowers. The first disbursement will take place after the 30 day hold and all eligibility requirements have been met.
A subsidized loan is need based, and is generally interest free while the student is enrolled at least half time. An unsubsidized loan is not need based, and will accrue interest from the time the loan is disbursed until it's paid in full. If you allow the interest to accrue while you're in school or during other periods of nonpayment, it will be capitalized - that is, the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount. The subsidized and unsubsidized rates are fixed as follows (please note that unsubsidized loan rates differ for undergraduate and graduate students):
Annual Loan Limits for Direct Loans
| Undergraduate Students | Graduate Students | |||||
| Dependent | Independent | |||||
| Annual Limit | Max Subsidized | Annual Limit | Max Subsidized | Annual Limit | Max Subsidized | |
| 1st year | $5,500 | $3,500 | $9,500 | $3,500 | $20,500 | not eligible |
| 2nd year | $6,500 | $4,500 | $10,500 | $4,500 | ||
| 3rd year and beyond | $7,500 | $5,500 | $12,500 | $5,500 | ||
| Total Loan Debt Limit | $31,000 | $23,000 | $57,500 | $23,000 | $138,500 | not eligible |
|
Interest Rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and DIrect PLUS Loans First disbursed on or after July 1, 2024 and before July 1, 2025 |
| Loan Type | 10-Year Treasury Note HIgh Yield | Add-On | Fixed Interest Rate |
| Direct Subsidized Loans and Direct Unsubsidized Loans for Undergraduate Students | 4.483% | 2.05% | 6.53% |
| Direct Unsubsidized Loans for Graduate and Professional Students | 4.483% | 3.60% | 8.08% |
| Direct PLUS Loans for Parents of Dependent Undergraduate Students and for Graduate or Professional Students | 4.483% | 4.60% | 9.08% |
Federal student loans also have annual and aggregate limits as outlined in the above charts.
Exit Counseling
Studentaid.gov
Students can view their federal loan history at any time 24/7 through Studentaid.gov. You will need your Federal Student Aid ID & password (the same used to sign your FAFSA and Master Promissory Note) to log into the system. For questions regarding Studentaid.gov, please contact the Federal Student Aid Center at 1-800-433-3243.
